Can We Expect An Oil Price Spike In November? --- or worse?

Discussion in 'Fuel' started by Carcus, Sep 2, 2018.

  1. Carcus

    Carcus Well-Known Member

    From the article:

    ...."Iran is beginning to exhibit the external features of extreme societal disruption in a way that we haven't seen in the last forty years. The last time there was this much civil unrest in this country, it was called "The Revolution."

    ............."In summary

    I think the stage is set for an explosive confrontation between the two military super powers if Iran becomes aggressive towards the shipping going through the Gulf. I believe that Iran will move militarily to punish the world for acquiescing to American sanctions, as a face-saving gesture.

    If the U.S. responds militarily, as we almost surely will, or the sanctions would just fall apart, there exists the potential for Russian and American airmen to face direct conflict.

    A few salient points. Neither Saudi Arabia, Russia, or the U.S. have the capacity to make up the loss of 4.4 mm BOPD from world markets. While all three countries have boosted their production in recent months, there will still be a net deficit on world markets. If the U.S. enforces these sanctions strictly, as we have to assume they would, there will be short fall of over a million BOPD reaching global ports, under the best scenario. I am taking into account that during the last sanction period Iran still manage to sell 3.2 mm BOPD. But, then we have to remember that this U.S. administration is much more likely to enforce them strictly."

    So, regardless of the political situation in Iran, there is going to be shortage of oil soon no matter what, in my view."
    Last edited: Sep 2, 2018
  2. Carcus

    Carcus Well-Known Member

    .... and the oil (incl. everything Iran can produce, .. and a whole lot more) has to flow, ... especially when you've got a brand new $26 trillion dollar 'road' that needs debt service

    "Xi first announced the trade initiative also known as the “New Silk Road” in 2013, which needs more than $26 trillion of infrastructure investment by 2030 to keep regional economies expanding. The project includes railways, power plants, ports, highways and other projects across the world, with Beijing providing billions of dollars in credit to drive these schemes."

    Is China’s $26 Trillion New Silk Road A Debt Trap?
  3. Carcus

    Carcus Well-Known Member

    Iran responsible for attack on two tankers: Pompeo
  4. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    Way before November , is my guess. The world is going to hell faster than we ever expected.
  5. Carcus

    Carcus Well-Known Member

    Wood Mackenzie consultant on why oil markets haven't spiked ....

    Flowers: Global oil demand will peak in 2030s

    Basically, .. not too long ago the oil markets would have spiked on all the bad news (5%ish oil is now off the market plus middle east tensions) , ... but there appears to be (barely?) enough oil on the market to absorb the loss (he seems to be indicating we're about at the limit of bad news for oil supply before the prices do ramp up).

    Also, .. he sees oil demand growth tapering off and becoming flat (peak demand) by 2035 or so.

    /my add, .. 4 of the 5 largest auto manufacturers for the US market have all announced serious electrification plans (imo)
  6. NeilBlanchard

    NeilBlanchard Well-Known Member

    The series of explosions and fire and other problems at the largest refinery on the east coast (in Philadelphia), may affect the price of gas, on the east coast at least?
  7. Trollbait

    Trollbait Well-Known Member

    The required switch to low sulfur marine fuel for shipping next year may also raise prices.
  8. RedylC94

    RedylC94 Well-Known Member

    It just went up ~25¢/gallon here (>200 miles from the east coast).
  9. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    Yeah , we're up to around $3.12-ish in my area.
  10. NeilBlanchard

    NeilBlanchard Well-Known Member

    We sold our last ICE car a couple of months ago, so I am not paying any attention to the price of gas.

    We have 3 electric cars, for 4 drivers.
  11. Trollbait

    Trollbait Well-Known Member

    Up ten cents since last week here, about an hour north of Philly.
  12. jcp123

    jcp123 Caliente!

    Any excuse to raise prices will be used - look at MTBE on the West Coast. Prices got jacked up to introduce this new, environmentally freindly fuel, and got jacked up again when MTBE was found toxic and had to be removed.

    Fuel prices have taxes, of course, but never think there’s zero link to the sellers...
  13. Carcus

    Carcus Well-Known Member

    "Iranian leaders have summoned the British ambassador as Tehran fumes over Britain's Thursday seizure of an Iranian tanker believed to be violating the European Union sanctions by providing crude oil to the Syrian regime.

    British Royal Marines supported the authorities in Gibraltar in taking the vessel amid evidence that it was trying to circumvent the EU sanctions on the Syrian regime. A senior Spanish official said the operation was requested by the United States."

    Britain seizes Iranian oil tanker headed to Syria, furious Tehran summons British ambassador over 'destructive' action
  14. EdwinTheMagnificent

    EdwinTheMagnificent Legend In His Mind

    At least we don't get sucked into a war with Iran all by ourselves.
  15. Carcus

    Carcus Well-Known Member

    “Abqaiq could be the Achilles’ heel of Saudi Arabia’s oil industry.

    Located in the kingdom’s eastern province, the facility filters impurities such as sulfur and gas from around 7 million b/d of crude. This is roughly equal to the country’s entire exports and a volume of readily available crude that is impossible to replace easily”

    Saudi Arabia oil facilities ablaze after drone strikes\
    "Footage showed a huge blaze at Abqaiq, site of Aramco's largest oil processing plant, while a second drone attack started fires in the Khurais oilfield.
    The fires are now under control at both facilities, state media said.

    A spokesman for the Iran-aligned Houthi group in Yemen said it had deployed 10 drones in the attacks.
    The military spokesman, Yahya Sarea, told al-Masirah TV, which is owned by the Houthi movement and is based in Beirut, that further attacks could be expected in the future.
    He said Saturday's attack was one of the biggest operations the Houthi forces had undertaken inside Saudi Arabia and was carried out in "co-operation with the honourable people inside the kingdom".
    Saudi Arabia is said to be shutting down around half of its oil output, the Wall Street Journal reports."
    Last edited: Sep 14, 2019
  16. Carcus

    Carcus Well-Known Member

    Conspiracy guy sez:

    Ghawar is in serious decline, and that news doesn't work with an upcoming IPO , ... so

    At least one more "attack" on Abqaiq will convince MBS that it's in the best interest of world energy security to pull back on Abqaiq and diversify elswhere:

    -- but, "of course", there's still trillions and kazillions of barrels left in Ghawar, ready for "spare capacity" when called upon -- thus boosting the IPO

    / you can't always trust the Saudis
    / you can't always trust conspiracy guy
  17. Carcus

    Carcus Well-Known Member

    "If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests," Crown Prince Mohammed said. "Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven't seen in our lifetimes."

    Saudi Arabia's crown prince says oil prices could go 'unimaginably high' unless 'firm action' is taken on Iran
    Yusuf Khan
    Sep. 30, 2019, 05:54 AM

    Saudi and Iran have been fighting a war over control of Yemen for some time. What is so important in Yemen?

    Yemen Reports Large Oil Discovery
    By Judith Miller
    Dec. 21, 1984
    Last edited: Sep 30, 2019
  18. Carcus

    Carcus Well-Known Member

    "With respect to public relations and optics, this so-called Cold War clash of the autocratically led petro-titans of the Saudis and the Russians is akin to the infamous line in the movie The Usual Suspects (1995), “The greatest trick the devil ever pulled was convincing the world he didn’t exist.”

    I believe that the Saudi-Russian fracture is a manufactured short-term separation rather than a divorce and they’ll be back at the OPEC+ table to reassess the global environment and establish a revised production deal during their next meeting scheduled for June 9-10."

    The Russo-Saudi Powerplay Against U.S. Shale Oil

    a different, and somewhat surprising {possible}} perspective here:
    "The End Game

    It is likely, in my view, that the endpoint will be similar to the last time this strategy was attempted. Oil prices could dip all the way into the $20s. Russia will probably eventually decide that the pain is too great, and come back to the table. In the interim, many shale oil producers will be forced into bankruptcy.

    Meanwhile, a bigger existential risk looms for the global oil industry. Electric vehicles (EVs) will continue to gain market share year after year. If we are entering a multiyear oil price war — as seems likely — it is possible that the oil industry never recovers.

    That is what can happen when there is a black swan event like coronavirus. The outcome can be beyond imagination. We have entered uncharted waters."
    Why Didn’t Russia Just Cut Oil Production?


    Outcome article #1 (back to business as usual0 seems the more likely to me,... #2 (Rapier's - possibility that oil price goes into permanent decline) seems possible, but premature
    Last edited: Mar 15, 2020
  19. Carcus

    Carcus Well-Known Member

  20. Carcus

    Carcus Well-Known Member

    So,.. much like when China goes "all in" with the Paris accord, crashes coal prices then buys up all the coal stocks (then procedes to build coal fired power plants like mad). Saudi Arabia has threatened the 'sickened' market with a flood of oil (a lie -- it actually doesn't have the capacity from its aging fields), .. this crashes the oil market and ... guess what?

    Saudi Arabia Is Buying Up European Oil Majors
    "The Saudi sovereign wealth fund has bought stakes worth a combined $1 billion in four European oil majors: Shell, Total, Eni, and Equinor, the Wall Street Journal reported citing unnamed people in the know."

    /isn't that market manipulation? isn't that supposed to be illegal? --- not if you do it 'right', I guess
    litesong likes this.

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